LTPZ Dividend Type Payments
Although LTPZ has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Pimco 15 Year U.S. TIPS Index Exchange-Traded Fund to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):
Pimco 15 Year U.S. TIPS Index Exchange-Traded Fund (LTPZ) |
Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
52.28 |
52.33 |
52.29 |
-0.07 |
175K |
- |
0.0B |
LTPZ Dividend-Like Income Using Covered Calls
With LTPZ at 52.29, here's a table showing how big the annual "dividend" (i.e. total annual call premium received) would need to be to attain 3%, 5%, and 10% annual yields. Also shown is the equivalent number of cents/day necessary to achieve each yield:
Annual Yield |
Annual Premium |
Cents/Day |
3% |
1.57 |
0.4 |
5% |
2.61 |
0.7 |
10% |
5.23 |
1.4 |
So now we need to find out of the money covered calls that pay at least the prescribed cents/day amount of time premium. That will generate income and, because they are out of the money, leave room for some upside potential on the stock. Here are some examples:
3% Yield On LTPZ Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
May 17 |
53.00 |
0.35 |
23 |
1.5 |
0.67 (1.3%) |
Jun 21 |
53.00 |
0.60 |
58 |
1.0 |
0.67 (1.3%) |
5% Yield On LTPZ Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
May 17 |
53.00 |
0.35 |
23 |
1.5 |
0.67 (1.3%) |
Jun 21 |
53.00 |
0.60 |
58 |
1.0 |
0.67 (1.3%) |
10% Yield On LTPZ Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
May 17 |
53.00 |
0.35 |
23 |
1.5 |
0.67 (1.3%) |
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